Scott Thomson, Naked Communications, and Alex Bentley, University of Durham on social networks, markets and marketing

1. understandingmarkets
Why it’s essential to put the
‘market’ back into marketing
We need to rethink how to engage with new kinds of consumer markets, say Scott
Thomson, Naked Communications, and Dr Alex Bentley, University of Durham
S
INCE LAST YEAR’S SEISMIC col-
lapse of financial markets, there
has been an audible rustle of head-
scratching by economists who didn’t see
it coming.
The unforeseen and unpredicted scale
of the crisis has since been more than
matched by the expression of loud and
vociferous opinion, sometimes from the
same people, about how governments
can, or should, intervene in future.
There is now an ongoing reappraisal of
national approaches to managing and
influencing increasingly interconnected
global financial markets; and the rules on
how we now navigate uncharted fiscal
waters are being written as a direct result
of this largely unexpected change. In Melanesian culture, the donor of a gift gains competitive status at the receiver’s expense
However, when it comes to the world
of marketing, where consumer habits keting practices based on correct assump- ic ocean, not merely to obtain ‘stuff’ from
have been transforming dramatically for tions about how a market can be influ- hundreds of miles away but to make per-
some time, there sometimes seems to be enced and grown?’ Or, put simply: sonal connections, marriages and alli-
less of an apparent ‘rethinking’ of rules of ‘Where is our understanding of the ances, and other ‘phatic’ exchanges.
the road, and more of a forced ‘rebooting’ nature of ‘markets’ and their dynamics in There is a lot of traditional anthropo-
of established approaches. everyday modern marketing?’ logical thinking that revolves around
Marketing planning meetings occur 1) The nature and value of social net- ‘gift-giving’ as not just being a seasonal
daily with phrases and language that works as ‘markets’. Amid the current kindness, or an economic exchange, but
sometimes reflect a mismatch of old and craze over social networks, it can a highly competitive means of boosting
new, such as: ‘identifying influentials’ sometimes be easy to overestimate their the status of the gift-giver at the expense
(who may not exist) (1), ‘targeting com- short-term significance (and underesti- of the indebted receiver. When we all
munities’ (who may reject such militaris- mate their longer-term impact) on mar- engage in this ‘status competition’ at
tic analogies and approaches), and ‘pro- keting practice. once, what often emerges is not chaos, as
ducing virals’ (less something that can be What is not in question is that their might be expected, but elegant markets
made than something that happens). success is based on some fundamental that are often, importantly, not apparent
There is nothing wrong, per se, with human traits that have been around for to any one individual.
‘segmentation’, ‘targeting’, or ‘position- some time – if we forget that, we are in In his classic study of Melanesian soci-
ing’, but some of the old language doesn’t danger of missing the mark – and unlock- ety, Argonauts of the Western Pacific (1922),
fit so well with a planning world now ing their potential value. It is the concept Bronislaw Malinowski famously noted
obsessed with ‘collaborative communi- of ‘markets’ themselves that is key. Only that the “extensive, complicated, and yet
ties’, ‘networks’ and ‘propagation’. This by examining the true nature of markets well ordered” Kula exchange system
mismatching can, at best, become oxy- can we sort the valuable marketing wheat across the southern Pacific was the result
moronic (is it right to ‘segment’ a com- from the social chaff. of no conscious design or institution.
munity?) and, at worst, may lead us down Markets mean trade, which in turn More recently, Stephen Lansing has
some fundamentally flawed paths. means survival, but they also help us described how traditional Balinese water
In a similar fashion to the ongoing re- define who we are as a community. We temples feature water goddesses who
appraisal in the global financial world, we don’t just trade things – we ‘exchange preside over a finely-tuned ‘market’ of
should be reassessing how to analyse and words’, and ‘trade places’, and the origin irrigation water. Without conscious
influence new kinds of connected con- of culture itself lies in different degrees of design, the water temple system has
sumer markets, which can operate inde- ‘value exchange’, whether that value is evolved over centuries of worship, and
pendently of any brand influence, and tangible or intangible. yielded optimal rice growth and control
where good and bad news travels further Market exchange, in its essence, basic- of pests.
and faster than ever. ally serves to maintain human relation- These anthropological cases mirror
We have to ask ourselves a number of ships. Thousands of years ago, the first Adam Smith’s ‘invisible hand’ of markets
difficult questions, such as: ‘Are our mar- Melanesians risked the treacherous Pacif- being made up of the collective self-inter-
© World Advertising Research Center 2009 October 2009 • Admap 15

2. ADM Oct 15-17 Thomson+Bentley.qxd 9/15/2009 12:17 Page 16
understandingmarkets
ested actions of a multitude of individuals industry in the analysis of networks,
who know their own motives but have no or the simulation of markets by model-
knowledge of the total outline of any of ling the activities of many individual
their social structure. agents. But this may be misplaced since
2) The misplaced cult of the individ- such ‘agent-based modelling’ only shows
ual. If the important stuff related to us that it is very difficult to assess the
understanding markets comes out as a behaviour of specific individuals without
result of individual actions, but often gauging the context of that behaviour,
bears no direct relationship to individual which is basically what the rest of the
motivations, why is our marketing cul- market is doing.
ture obsessed with the reported attitudes If we accept all the above as fundamen-
and actions of those individuals? Why are tally true, then why, as an industry, don’t
we more preoccupied with the ‘physics’ of we regularly make the market, and not the
individual actions than with the ‘chem- individual, the starting unit of analysis
istry’ of collective outcomes? and planning? Why don’t we learn from
People have never been autonomous academics studying complex ‘systems’ as
‘individuals’, as market surveys will often that complementary starting point?
treat them, since our brains have evolved Even if we conclude that things are too
to be social, and social exchange is the key complex to be predictive, we should not
(2). Humans are the only primate species just hang our hats on other planning
where mothers regularly share their own methods that offer the comforting myth ple, announcing he was deciding whether
newborns with members of their group of predictability. We would better practise or not a firm of this stature was good
(an act of immense trust), and the instinct proper ‘due diligence’ in the knowledge enough to get a loan.”
to share and exchange is so basic that that full, unfettered predictability may Cayne knows all too well that, while
scholars such as Sarah Hardy and Haim be unattainable. the bailout money may have come his
Ofek (3) argue that, more than a million 3) Markets: a competition to co-oper- way, prestige definitely went the opposite
years ago, our pre-human ancestors only ate. Online social networking is nothing way, towards the giver.
managed to survive through mutual more than a market for information Much in human society reflects a form
exchange of hunted meat for gathered between individuals, with the continual of ‘prestige market’, where each social
roots or nuts. production of new ideas. The goal for interaction effectively changes the status
Fast-forward to a knife-crime-ridden many is to have as many people as possi- of two individuals (5). We learn who is
council estate in Glasgow in the 21st cen- ble notice your information, and so the important from other people, so when we
tury, or a part of London where fighting process can paradoxically be seen as a see Jim deferring to Susie in the board-
dogs are a fashionable accessory, and we competition to ‘co-operate’, in the sense room, we know that we should listen
see the ongoing need to have the ability to of a race to be credited for sharing the more to Susie than to Jim – at least on that
assess the potential benefits and risks of most information. particular issue. Jim has effectively just
interacting with strangers. We have bas- If this is true for modern day com- transferred prestige to Susie, in a ‘prestige
ically evolved to be great predictors of the munities, the same has always been true market exchange’. Susie might then like
behaviours of others, if only because our of their predecessors and, if we are to to see people deferring to Jim, because
survival used to depend on it, and some- leverage their true value, we cannot then they will defer to her by association,
times still does. ignore all the legwork done in trying to so she collects a bit of value – a ‘retainer
Assessing risk, reading others, and understand these ancient equivalents of fee’, if you like – from an interaction
trading and exchanging are at the heart of modern communities. involving two other people. This kind of
what makes us human. These social func- Just as the Melanesians’ Kula system social transfer happens constantly in
tions are so inherent to our functioning was a competitive means of boosting the online social networks.
that, on brain scans, for example, the status of the gift-giver, the recent financial The best a brand can hope for in enter-
regions where physical pleasure registers bail-outs can be seen in more than money ing such a domain is that they likewise
are the same places where social accept- terms by considering the revised statuses gain prestige value from an interaction
ance lights up (4). of ‘giver and receiver’. This sheds light on between two other people. The worst that
Government policymakers are on to comments made by Jimmy Cayne, former a brand can do is undermine the prestige
part of this, with new initiatives such as chief executive of US bank Bear Stearns, of market participants, which can, unfor-
the ‘Social Brain’ project at the Royal Soci- regarding Timothy Geithner of the New tunately, be the case with much misguid-
ety of Arts (socialbrain.rsablogs.org.uk). York Federal Reserve: “The audacity of ed branded content development.
In parallel, there is a growing cottage that prick, in front of the American peo- Achieving the most popular page in
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3. ADM Oct 15-17 Thomson+Bentley.qxd 9/15/2009 12:17 Page 17
Scott Thomson is global head of
evaluation at Naked Communications
and founder of the marketing analytics
unit Naked Numbers.
scott_thomson@nakedcomms.com
Alex Bentley (far right) is reader in
anthropology at Durham University,
where he is co-founder of the Centre for
the Coevolution of Biology and Culture.
r.a.bentley@durham.ac.uk
which they consider your brand as a
valid constituent part of their chang-
ing market, and how your brand exists
in terms of ‘market prestige’.
d) Forget the myth of the silver bullet for
targeting, but instead map and quant-
ify market propensities for brand trac-
tion, uptake and spread.
e) Forget over-prolonged but diligent
planning projects leading to ‘large in-
formed punts’, and instead put in place
accountability frameworks that get an
immediate read on any gained market
traction, and then scale up investment
accordingly.
f) Do more innovative stuff more quick-
ly, and learn fast.
5) Put the ‘market’ back into mar-
keting. It is all too easy after big market
events, such as the recent financial crash,
your community is not a fuzzy, feelgood The Balinese water temple system is a finely- to grab for the lexicon of natural disasters,
moment, where everyone likes you; it is tuned ‘market’ of irrigation water, which has describing the events as a ‘tsunami of neg-
the acquisition of economic influence in evolved over centuries of worship to yield ative sentiment hitting markets’, or as
an exceedingly competitive online mar- optimal rice growth and control of pests ‘earthquakes shaking the foundations of
ket. The only difference with online mar- the world economy’. As clichéd as these
kets is that we can see the network con- aiming for a particular point of impact. metaphors may be, they do, however, cap-
nections that once were implied or inter- Instead, we should look upon it as ture the unexpected nature and the scale
nalised in our memories; if Jim defers to more akin to a game of pinball, and recog- of some market events. Markets, just like
Susie, we can often tell pretty easily, nise that once we set the ball in play, we the shifting patterns of tectonic plates,
because Jim, with 20 friends, posts a blog have limited but crucial points of influ- may be too complex to be predictive and,
link to Susie, who has several thousand ence, but that there are ultimately other if we accept this as the true state of affairs,
other followers. market forces at work. the implications for modern marketing
4) Marketing is like pinball, not ten- This is not to say we cannot maximise practice are clear.
pin bowling. This might lead us to think the chances of investment success, as First and foremost, we need to put mar-
that network analysis is the key to it all. If there are some clearly emerging ‘new kets, and our understanding of markets,
we can ‘map’ these interactions online, we rules’ we can adopt to help our chances: back into marketing.
can see how the world works. Well, prob- a) Understand markets by focusing the
ably not, if only because each part of our totality of market changes. Make the 1 A Bentley and M Earls: Forget influentials,
lives represents a different network, and system as a whole the core bit of analy- herd-like copying is how brands spread.
that network changes – often radically - sis, not the individual or the network Admap (Nov) 2008, pp19-22.
every day. of individuals. We should aim our tools 2 RIM Dunbar and S Shultz: Evolution in the
The constant communication among and technology here, moving away social brain. Science 317: 1344-1347, 2007.
so many people is essentially impossible from, for example, the analysis of indi- 3 H Ofek: Second Nature: Economic Origins of
Human Evolution. Cambridge University
to track meaningfully and learn from at vidual attitudes towards incorporating
Press, 2001.
that individual level. Yet this is precisely social and market ‘frames’ of reference. 4 MD Lieberman and NI Eisenberger:
the point: markets emerge from messy b) Forget researching individual self-per- Pains and pleasures of social life. Science
interactions and, as market planners, it is ception, but do collate individual per- 323: 890-891, 2009.
better to read the ebb and flow of overall ceptions of others/wider market 5 J Henrich and F Gil-White: The evolution of
market conditions than it is to hunt trends, and our perception of what prestige. Evolution and Human Behavior 22:
for silver bullets. We have to recognise those ‘others’ are up to. 1-32, 2001.
the limited degree of influence we have c) Make people your partners, make your
in this context. We should no longer look own prestige markets and build com- more on understanding
at marketing investment as analogous munities of competitive-creation (not markets at
to a well-thrown ten-pin bowling ball just co-creation). Check the extent to www.warc.com
© World Advertising Research Center 2009 October 2009 • Admap 17